Crude Oil Price Update – Trade Through $52.60 Confirms Closing Price Reversal Top with $50.63 Next Target

U.S. West Texas Intermediate crude oil futures are trading flat early Thursday after posting a potentially bearish closing price reversal top the previous session. Mounting coronavirus cases globally are raising demand concerns, although a drawdown in U.S. crude stocks for a fifth straight week and robust data from China capped losses.

At 07:39 GMT, March WTI crude oil is trading $52.92, down $0.04 or -0.08%.

In other news, U.S. crude oil stockpiles last week fell more than expected, while gasoline and distillate inventories rose as refiners ramped up output to its highest level since August, the Energy Information Administration said on Wednesday.

Meanwhile, China, the world’s second largest oil consumer, reported its biggest daily jump in new COVID-19 cases in more than 10 months as infections in northeastern Heilongjiang province nearly tripled, underscoring the growing threat ahead of a major national holiday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside with the formation of a potentially bearish closing price reversal top.

A trade through $53.94 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $52.60 will confirm the chart pattern. This would change the trend to down, but it could trigger the start of a 2 to 3 day correction.

The minor range is $47.31 to $53.94. Its 50% level at $50.63 is a potential downside target and support level.

Daily Swing Chart Technical Forecast

The direction of the March WTI crude oil futures contract on Thursday is likely to be determined by trader reaction to $52.60.

Bullish Scenario

A sustained move over $52.60 will indicate the presence of buyers. Taking out $53.94 will indicate the buying is getting stronger. This would put the market back on course for an eventual test of the January 8, 2020 top at $57.41.

Bearish Scenario

A sustained move under $52.60 will signal the presence of sellers. This could trigger the start of a 2 to 3 day break into the first pivot at $50.63.